There is lot of buzz around CPQ in the Salesforce community. Its a key business area for both Salesforce and its partner companies. However from the end user point of view, its hard to take a plunge without understanding the basics of CPQ. My intention is to let you know the basic so you have a solid foundation that you could build on top of with your SMEs.
First thing to know about CPQ is that it stands for Configure, Price, Quote! That is a good start! Configure, Price and Quoting are the pillars of eternity in any business: be it products or services. And CPQ is a tool to simplify the middle office process around selling your products. The front office would be your e-commerce application and the back office would be your ERP. The middle office is the layer responsible for providing accurate pricing with any given product configuration scenario for a specific customer. Multiple factors could affect price calculation hence the term MDQ (Multi-dimensional Quote) Product . These processes could directly impact your sales and revenues as pricing is the most competitive tool in any business. CPQ could also be used for pricing Services and is not just limited to Products.
A typical list of features of CPQ are:
Product Configuration
Configuration Options
Pricing Rules
Price Adjustment
Purchase History
Quote Sending
CRM Integration
Proposal Automation
Customer Self Service (eCommerce)
To be able to judge if you require a CPQ solution its crucial that you access your QTC(Quote to Cash) pain points. QTC comprises of the process starting from Order Creation to Revenue Recognition and Billing. The intermediate steps would be specific to every business. So no matter which CPQ product you plan to choose you might have to customize it to suite your needs. It is often seen that its required to streamline business process as well to assist this change in case your current processes are very adhoc.
Usually you would require a CPQ expert to access these gaps for you. They would be able to help you identify any leaks in your process that could adversely impact your sales and realization of revenue and help you bring about this change.
The complexity of optimum pricing gets compounded if you have large range of Products and SKUs over and above discontinued items or discounts. Also if your business is spread across different geographical locations it might require some customization of process and pricing structure based on region. Different stores could be a factor for pricing structure as well.
Typically any organization is a hotchpotch of all the above pricing challenges and this is only tip of the ice-berg. It can can really get complex when you want different pricing in the same shop for different customers (Special pricing for premium customers). To up the challenge a notch you could also think about volume based pricing.
If you think about the corner shops that do not price mark all their products the shop keeper does all this complex pricing logic the moment you enter the shop just by looking at your shoes and that too in their heads multiplied by the factor of how often you visit and how big purchase you make. You could do the same however you you own a supermarket or a chain of super markets across the globe for example Aldi you could need to put your pricing logic on the cloud and CPQ could help you do that!
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